For the Quarter Ending September 2024
North America
In Q3 2024, fatty acid prices in the North America, particularly U.S. experienced a notable upward trend, driven by rising production costs and stable demand from the personal care sector. July started with an increase in prices due to high palm oil costs, with Malaysian exports rising 40% to 1.69 million tonnes. Although there were supply pressures from reduced manufacturing activity, producers maintained higher prices to support profitability amid muted demand.
August continued this upward momentum as the personal care sector showed consistent inquiries. Palm oil stocks in Malaysia reached a six-month high of 1.88 million metric tons, and while palm oil exports decreased, production rose by 2.87%. The crude palm oil reference price rose to USD 839.53 per tonne, influencing market conditions for fatty acid producers. In September, fatty acid prices climbed further as demand remained stable despite a slight decline in palm oil production. Increased palm oil prices due to rising CPO reference prices raised concerns about future production costs. Overall, the quarter reflected a complex interplay of demand stability and supply chain pressures impacting pricing strategies in the fatty acid market.
Compared to the same quarter last year, prices were on the higher side. The quarter-on-quarter comparison recorded a significant increase of 5%, with prices showing an incline of 6% between the first and second half of the quarter. The quarter-ending price stood at USD 2030/MT of Fatty Acid DEL USGC in US, reflecting the prevailing upward pricing trend.
APAC
In Q3 2024, fatty acid prices in APAC region, particularly in China consistently rose, primarily driven by strong demand from the personal care sector and fluctuations in palm oil prices. The quarter began with a notable increase in palm oil exports from Malaysia, climbing 39.92% from 1.21 million tonnes in June to 1.69 million tonnes in July. This surge, coupled with increased inquiries from manufacturers, pushed prices higher. Additionally, transportation costs rose due to port congestion, alongside a 2.8% increase in Indonesia's crude palm oil (CPO) reference price to USD 800.75 per tonne. In August, prices continued their ascent, supported by sufficient palm oil availability and rising production levels, despite a 9.74% decline in exports. By September, demand remained robust, with concerns over potential declines in palm oil production due to the upcoming northeast monsoon season. Increased domestic consumption in India and festive season restocking further fueled price hikes, solidifying the upward trend for fatty acids. Compared to the same quarter last year, prices were on the higher side. The quarter-on-quarter comparison recorded a significant increase of 6%, with prices showing an incline of 8% between the first and second half of the quarter. The quarter-ending price stood at USD 2450/MT of Fatty Acid C8-C10 FOB Shanghai in China, reflecting the prevailing upward pricing trend.
Europe
In Q3 2024, fatty acid prices in Europe, particularly Germany displayed a fluctuating trend, influenced by varying demand from the personal care sector and palm oil supply dynamics. July began with a downward trend in fatty acid prices, primarily due to reduced consumption from the downstream surfactant and detergent industries during the holiday season. Despite a significant 40% increase in Malaysian palm oil exports, reaching 1.69 million tonnes, manufacturing activity slowed as indicated by a decline in Germany’s official statistics. In August, prices began to recover, supported by steady demand in the personal care sector, although manufacturers scaled back purchases due to planned maintenance. Malaysian palm oil stocks rose to their highest level in six months, ensuring adequate supply despite a slight decrease in exports. By September, fatty acid prices rose again, driven by sustained demand and a 9.3% increase in palm oil exports. However, concerns about stagnant production in Malaysia and Indonesia, alongside rising crude palm oil prices, hinted at potential upward pressure on manufacturing costs. Overall, Q3 reflected a complex interplay of demand, supply stability, and cost factors impacting pricing strategies in the fatty acid market. Compared to the same quarter last year, prices were on the higher side. The prices showed an incline of 5% between the first and second half of the quarter. The quarter-ending price stood at USD 3200/MT of Fatty Acid C8-C10 FOB Hamburg in Germany, reflecting the prevailing upward pricing trend.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Fatty Acid market experienced a mixed trend, driven by several key factors. In April, the rise in Fatty Acid was mainly due to rising production costs, primarily influenced by the bullish prices of Palm Oil. Additionally, a decrease in operating rates among manufacturing firms intensified pressure on the supply side. Manufacturers responded to the bullish trends in upstream prices and the limited availability of finished goods by maintaining high prices to enhance profitability. However, towards the progressement of second quarter of 2024, the prices of Fatty Acid have started to move within a narrow range.
In the USA, where price changes were most pronounced, a Seasonal factors also played a role, with typical Q2 demand fluctuations contributing to the overall price dynamics. The correlation between rising natural gas inventories and reduced energy costs also influenced the market, aligning with the bearish sentiment from falling Palm Oil prices globally.
Comparing the first and second halves of the quarter, prices saw a slight decline of 1%. The quarter concluded with Fatty Acid Stearic Acid Triple Pressed DEL USGC priced at USD 1880/MT in the USA. Notably, there were no significant disruptions or plant shutdowns reported during this period, further underscoring the managed supply conditions amidst the declining price trend.
APAC
In Q2 2024, the Fatty Acid market in the APAC region experienced upward pricing trends due to several key factors. Increasing upstream Palm Oil costs, driven by constrained production and heightened demand, played a pivotal role. Additionally, active inquiries from the downstream personal care sector bolstered market sentiments, prompting manufacturers to maintain higher price levels. The supply side also faced challenges, with limited availability of finished goods exacerbated by operational disruptions and plant shutdowns, impacting the overall market balance. China, in particular, recorded the most substantial price adjustments. The nation saw an uptick in Fatty Acid prices, primarily due to intensified demand from the personal care industry and increased procurement of Palm Oil. This quarter, China's Fatty Acid market experienced a 3% increase compared to the previous quarter, reflecting a strong, consistent rising trend. Seasonality also contributed to this trend, as post-holiday manufacturing activities surged, driving higher procurement needs. The correlation between downstream demand and upstream cost pressures was evident, leading to sustained positive market sentiments. Comparing the first and second half of Q2, China saw a 1% increase in prices, underscoring a persistent upward trajectory. Concluding the quarter, the price of Fatty Acid C8-C10 FOB Shanghai stood at USD 2230/MT, highlighting a positive pricing environment driven by resilient demand and constrained supply dynamics. The overall pricing sentiment for Fatty Acid in the APAC region, particularly in China, has been predominantly positive, reflecting robust market fundamentals and anticipations of continued growth despite supply-side challenges.
Europe
The second quarter of 2024 has witnessed an upward trend in Fatty Acid prices across the Europe Region, driven by several critical factors. Elevated production costs, largely influenced by bullish Palm Oil prices, have significantly impacted Fatty Acid pricing. Reduced operating rates among manufacturing firms have exacerbated supply-side pressures, further escalating costs. Additionally, rising demand from downstream industries, particularly the Personal Care sector, has contributed to the price surge. A notable factor was the shipping disruptions in the Red Sea, which forced vessels to reroute, leading to longer transit times and higher freight charges, thereby inflating transportation costs for Fatty Acid. Focusing on Germany, which recorded the most substantial price changes, the upward trajectory in prices has been pronounced. The German market has experienced a marked increase in Fatty Acid prices due to reduced manufacturing activities and higher input costs. The correlation between supply constraints and rising demand has reinforced the bullish market sentiment. Seasonal factors also played a role, with the second quarter typically seeing higher demand for personal care products. From a year-over-year perspective, the percentage change indicates a significant price rise, while the comparison with the previous quarter in 2024 shows a 27% increase. The price difference between the first and second half of the quarter was marginal at 1%, reflecting a consistent upward trend. The latest quarter-ending price for Fatty Acid C8-C10 FOB Hamburg in Germany stands at USD 3130/MT, underscoring the positive pricing environment throughout the quarter. This upward momentum highlights the confluence of supply-side constraints, increased production costs, and robust downstream demand, solidifying the bullish sentiment in the Fatty Acid market.
For the Quarter Ending March 2024
North America
In Q1 2024, the pricing dynamics of Fatty Acid in the North America region, specifically in the USA, were influenced by a combination of factors beyond the conventional top three. While the top influences included reduced production activities during the winter months, limited availability of finished goods, and inquiries from the downstream Personal Care industries, there were additional nuanced factors at play.
In January, the prices of Fatty Acid have escalated in the domestic market of the USA. amid an increase in the upstream, Palm Oil prices an upward shift has been observed in the pricing dynamics of downstream derivatives including fatty Acid. Thus, foreseeing the rise in procurement levels, coupled with low supplies, the manufacturers have opted to keep their prices at higher levels. Market sources have reported that Palm Oil supplies have dwindled in key manufacturing nations Indonesia and Malaysia due to increased focus on biodiesel production. According to data from the Malaysian Palm Oil Board, Malaysia's palm oil stocks at the end of February dwindled to their lowest levels in seven months as production hit a 10-month low, offsetting the slowdown in exports.
Overall, the pricing environment for Fatty Acid in Q1 2024 in the North American region has been relatively stable, with some fluctuations influenced by supply and demand dynamics. The latest quarter-ending price for Fatty Acid Stearic Acid Triple Pressed DEL USGC in the USA was recorded at USD 1810/MT.
APAC
In Q1 2024, the pricing environment for Fatty Acid in the APAC region has been predominantly stable, with some variations observed in specific countries. In China, the largest market for Fatty Acid, prices have seen significant fluctuations. The overall trend in the market has been influenced by factors such as the demand from downstream industries, availability of upstream Palm Oil, and geopolitical tensions impacting shipping routes.
In addition, in February, after the Spring Festival Holidays, the Chinese downstream manufacturers were also interested in the replenishment of their inventories, thus boosting their inquiries to the manufacturers in the exporting nations of Indonesia and Malaysia.
In China, prices of Fatty Acid have increased by 1.4% compared to the previous quarter. This rise can be attributed to an uptick in demand from the downstream Personal Care industries and higher prices of upstream Palm Oil. However, the market has also faced challenges due to reduced manufacturing activity and disruptions in shipping routes, leading to increased freight rates.
The quarter-ending price for Fatty Acid C8-C10 FOB Shanghai in China is USD 2170/MT.
Europe
The Fatty Acid market in Europe experienced a mixed pricing environment in Q1 2024. Several factors influenced market prices during this quarter. Firstly, the demand from the downstream Personal Care industries remained subdued, leading to weak market sentiments.
On the supply side, the operating rates of Fatty Acid manufacturing firms were under pressure due to tepid demand from the terminal industries. Some companies even initiated scheduled maintenance during this period to alleviate inventory pressure. However, the availability of Fatty Acid remained sufficient to meet demand. This, coupled with abundant gas inventory levels, eased supply concerns and lowered European gas prices. According to insights shared by regional manufacturers, palm oil has been traded at a premium in Europe due to higher freight costs, making it even more expensive for European buyers, due to shipping disruptions in the Red Sea caused by geopolitical tensions.
In terms of price trends, Germany experienced significant price changes compared to the previous quarter. The market started the quarter with lower prices, but they gradually increased towards the end. The quarter-ending price for Fatty Acid C8-C10 FOB Hamburg in Germany was USD 2650/MT.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, the Fatty Acid market in North America experienced mixed trends. The market was primarily influenced by several factors. Firstly, there was moderate supply as the production of Fatty Acid was affected by adverse weather conditions caused by El Nino. This led to a decrease in production capacity and subsequently supported a price hike. Additionally, demand for Fatty Acid remained moderate, with positive sales growth seen in the healthcare fabric and home care sectors. However, overall organic sales growth was limited to 5%. In terms of plant shutdowns, no major issues were reported during this quarter.
In the United States, Fatty Acid prices showed a slight increase throughout the quarter. However, prices dropped by 2.3% in December. The price trend in the US was influenced by factors such as energy costs, palm oil production disruptions in supplier countries, and the impact of freight charges due to the Israel-Hamas conflict.
Overall, the Fatty Acid market in North America experienced a mixed quarter, with supply and demand factors influencing price fluctuations. The latest price of Fatty Acid Stearic Acid Triple Pressed DEL USGC in the US for the current quarter is USD 1685/MT.
APAC
The fourth quarter of 2023 (Q4) has been a challenging period for the Fatty Acid market in the APAC region. The market has been heavily impacted by several factors throughout the quarter. Firstly, the adverse weather conditions caused by El Nino have affected production, leading to supply chain disruptions and inventory management challenges. Secondly, the demand for Fatty Acid has been moderate to high, driven by the upcoming festival sales in the South Asian market. However, global headwinds and increasing interest rates have created market uncertainties. Lastly, the ongoing Israel-Hamas war has further added to the volatility in energy prices, affecting the overall sentiment in the market. In terms of specific country analysis, China has experienced the most significant changes in Fatty Acid prices. The price of Fatty Acid C8-C10 FOB Shanghai in China for the current quarter is USD 2100/MT. This represents a significant decrease compared to the same quarter last year, with a percentage change of -58%. The price has also decreased by -64% compared to the previous quarter of 2023. Additionally, there has been a price decrease of -45% in the second half of the quarter compared to the first half. Overall, the Fatty Acid market in the APAC region has faced challenges due to supply chain disruptions, moderate demand, and geopolitical tensions. The market has experienced price volatility, with China being the most affected.
Europe
The price of Fatty Acid has witnessed a downtrend in the fourth quarter of 2023. Firstly, the demand for Fatty Acid has remained low throughout the quarter, particularly in the Personal Care industries. This has led to a decrease in prices as manufacturers have released inventories at lower prices to stimulate demand. Additionally, the availability of upstream Palm Oil has been abundant, leading to reduced prices for Fatty Acid production. Furthermore, the energy market has had an influence on Fatty Acid prices. The relatively mild winter in Europe has resulted in a decline in natural gas demand, leading to lower manufacturing costs for Fatty Acid. According to the Federal Statistical Office, Germany's inflation rate increased to 3.7% YoY in December, up from 3.2% in November, mainly due to a 4.1% rise in energy prices influenced by a government subsidy, pressuring the purchasing power of the Fatty Acid end-use industries. The sluggish demand from the Personal Care industries amidst the destocking season and the ample availability of upstream Palm Oil has contributed to the decrease in prices. The price of Fatty Acid C8-C10 FOB Hamburg in Germany for the current quarter is USD 2410/MT.
For the Quarter Ending September 2023
North America
At the start of Second quarter Fatty Acid prices have continued to follow the bearish trend observed last month. This is because of the slow pace of enquiries from the end-use industries such as personal care sector and food supplements sectors. The decrease in Palm oil prices in the exporting nations also have contributed to the downtrend of fatty acid prices in North American market. Following the bearish trend till August, Fatty acid prices have started showing improvement in September since the festival season demand have resulted the quoted prices to be heightened from supplier markets. Fatty acid prices in North American market have been hovering around USD 1690 per metric tonnes, DEL USGC, in the month of September. The consumer price index in North America has been risen by 0.4% in September against August CPI while the retail sales has registered a steady growth. Pharmaceutical retail sales business score has been dropped by 11 in August, however September month have showed little improvements.
APAC
In the starting month of Q3 Fatty Acid prices have been seen to continue the downward tail of last month. The manufacturing operations have been reported to be active amid a slowdown in economic conditions. Adequate availability of raw materials from international suppliers and domestic bio-refineries have pushed fatty acid manufacturer to revise their prices in the month of July. In China Fatty acid prices have continued the bearish trend and reached to USD 5844 per metric tonnes, FOB Shanghai. However, in India, the prices of fatty acids have started travelling upward in August and Continued till September, since festive sales in on the top. In India Fatty Acid prices has been traded at USD 1238 per metric tonnes while in Indonesia Fatty Acid has registered a price of USD 1060 per metric tonnes, FOB Tanjung Priok. At a time when exports have been impacted by the economic slowdown in parts of the world, strong domestic demand have been playing major role in India. Consumer Goods have registered a healthy sale in the September quarter, with rural demand seen to be strong as well. Moreover, Indonesia has raised its crude palm oil reference prices for Oct 1-15, which have provoked domestic producers to store their Palm oil inventory for future demand.
Europe
All over Fatty acid prices in Q3 has followed a bearish trend in Eurozone’s industry. Poor demand in downstream personal care industry amid a slowdown in overall economic growth of Germany has forced Fatty acid market to move downward. Ample production and inventory in Malaysia have further supported the import prices of Palm oil to become ease. However, unlike Asia and America, Fatty acid prices in Germany have continued the bearish trend in the month of September also since economy has been still stumbling with week consumer confidence. Fatty acid prices as of Sept. 29 has been valued at USD 5770 per metric tonnes, FOB Hamburg. EU’s deforestation-Free Regulation (EUDR) upon El Nino’s impacts have threatened the palm oil imports volume from major supplier countries. Meanwhile, under an uncertain energy market Consumer has been reluctant to invest their savings in luxurious goods. Shopping mall activity have also reported a drop in September. Furthermore, due to sluggish economy regional investors have been diverting towards overseas market like China. As per sources, Malaysia has been looking for alternative options for palm oil markets rather than Europe due to EU’s deforestation strategies. The Composite Purchasing Manager Index (PMI) have been improved from August’s 46.6 to 47.1 in September, indicating a slow growth, though it has been still below 50. Moreover, market has been keeping an eye on next US Federal decisions on rates and brent crude future.
For the Quarter Ending June 2023
North America
The reduction in demand from the downstream personal care sector has weakened the market fundamentals of Fatty acids in the domestic market of the USA. The failure of two financial banks in late Q1 has worsened market concerns, which have been further compounded by the weakening of energy material prices on the upstream front. This has put downward pressure on the price realizations of Fatty Acids. Additionally, the Federal Reserve's tight monetary policies have contributed to a slower easing of inflationary pressure in the US market in April. Furthermore, in May, the rise in price offers was mainly attributed to the increase in inquiries from the downstream Personal Care sector. On the upstream front, the availability of Palm Oil was also sufficient, as production rates have increased this month in the key manufacturing nation, Malaysia. The US market has been facing challenges as the severe impacts of inflationary pressures, tight monetary policies, and the financial sector worries have not vanished. Core inflation has consistently exceeded the targeted levels set by the US Federal Reserve and has been gradually decreasing at a slower pace, resulting in strained trade activities. Furthermore, as Federal Reserve Chairman Jerome Powell indicated that two additional rate hikes are planned for this year to control the sticky inflation, Fatty Acid market sentiment was further undermined at q2-end.
APAC
In the domestic market of China, the prices of Fatty Acids have demonstrated mixed market sentiments in the second quarter of 2023. In April, the prices of Fatty Acid has gained upward momentum in the Chinese domestic market. The stronger demand for upstream Palm Oil has led to an increment in its prices, reflecting a surge in the pricing dynamics of its downstream derivatives. The exports of Malaysian Palm Oil to China have also escalated amidst an active demand from the downstream personal care sector. The Chinese economy has been gradually strengthening after the lifting of COVID-19 restrictions. In addition, the declining costs of Coal and other energy materials have decreased the operating costs of specialty chemicals, including Fatty acids, which in turn has prompted the manufacturers to speed up production in the given timeframe. However, in the second half of Q2, the prices of Fatty Acid have plummeted. The weak demand from the Western markets has tampered with the market momentum, inflicting the exports from China to decline by 7.5% in May on a y-o-y basis. Furthermore, on the upstream cost front, the rise in Palm Oil production has led to stockpiling of the product in the key manufacturing nation, Malaysia weakening the price realizations of its downstream derivatives, including Fatty Acid.
Europe
The prices of Fatty Acid have witnessed volatile market sentiments in the domestic market of Germany. In April, the prices of Fatty Acid has escalated. The export ban induced on Palm Oil Supplies by the major manufacturing nation, Indonesia, has resulted in the limited availability of raw materials to carry out the production of downstream derivatives, including Fatty Acids. Manufacturing activities have remained under pressure in the European region amidst the still-high inflation levels. However, the decline in consumption from the downstream personal care sector has been responsible for the downshift observed in the price realizations of Fatty Acids towards the end of the second quarter. Overall, The availability of the finished goods was sufficient to cater to the downstream production. Industrial production has been suppressed in the wake of adequate existing inventories, casting a shadow upon the overall recovery after its recent recession in the biggest economy of Europe. Amid lower demand for Fatty Acids, supply chain pressures have been alleviated. As a result, The delivery times fastened in June and surpassed May's entry. Consequently., Fatty Acid C8-C10 FOB Hamburg prices were settled at USD 7176 per ton in June
For the Quarter Ending March 2023
North America
In early Q1, the pricing dynamics of the Fatty Acid remained at the upper levels in the US market. The downstream purchases from the personal care industries escalated and strengthened market sentiments for Fatty Acids. The release of inventories has enhanced with bullish market sentiments. The production facilities were operating at a regular pace, and there was an adequate supply of goods to meet the downstream demand. However, in March, the price trends of Fatty Acid progressed in a southwards direction. The input energy material costs have been eased and alleviated the pressure on the manufacturing activities. The weak economic conditions brought on by the failure of two banks, Silicon Valley and Signature Bank, have fumed the trade activities in the US market, leading to a downturn in the Fatty Acid market. The ChemAnalyst database has shown that Fatty Acid Stearic Acid Triple Pressed DEL USGC prices were concluded at USD 2020 per ton at the end of the first quarter.
APAC
Throughout the first quarter of 2023, the prices of Fatty Acid has remained under pressure owing to average demand fundamentals. The manufacturing sector has started to strengthen in the domestic region of China after the removal of COVID restrictions. The demand from the downstream personal care industries improved and reinforced the market fundamentals of Fatty Acids in mid-Q1. After the spring festival holidays, the shortage of workforce has led to production cuts across the nation, leading to limited availability of the finished goods in the domestic region. As a result, the prices of Fatty Acid has remained on the higher end. However, the slowdown in demand from the Western market has weakened the exports from China, and the transportation and logistics costs have also settled lower. Consequently, Fatty Acid C8-C10 FOB Shanghai prices were settled at USD 6426 per ton in March.
Europe
In the German market, the prices of Fatty Acid has demonstrated mixed market sentiments in the first quarter of 2023. The demand from the downstream personal care sector has remained muted amid the raging inflationary pressure in early Q1. On the supply side, there was sufficient availability of the finished goods in the domestic region. However, the prices of Fatty Acid improved in the mid-Q1 amid the rising costs of upstream Palm Oil. The exporting country Indonesia has witnessed a rise in upstream Palm Oil costs due to escalating domestic demand and adverse weather conditions. Furthermore, the rising inflationary pressures have continued to impact manufacturing across the nation. Thus, Fatty Acid C8-C10 FOB Hamburg prices averaged at USD 7420 per ton at Q1-end.
For the Quarter Ending December 2022
North America
In the US market, Fatty Acid prices witnessed a volatile trend in Q4. The prices inched higher in October amid rising inflation and firmer raw materials prices. The market players have reported that inquiries from the downstream detergent and personal care industries have increased and led to a positive development in the market growth of Fatty Acid among the manufacturers. Furthermore, the cost pressure from upstream Palm Oil has diminished, and freight charges across the major trade routes have declined sharply. In late Q4, an increase in procurement from the downstream personal care and other end-use industries accelerated the demand dynamics of Fatty Acid in the domestic region. Fatty Acid Stearic Acid Triple Pressed DEL USGC prices were observed to be hovering around USD 1765 per ton at the quarter end.
APAC
In the fourth quarter of 2022, the prices of Fatty Acid have demonstrated a volatile trajectory. Spot inventories were at higher levels due to the relatively low demand from the downstream food and personal care industries. Manufacturers have decreased their offers to maintain supply-demand equilibrium because of growing supply pressure. In addition, the weaker ringgit in one of the major Palm Oil producing nations, Malaysia, has made upstream Palm Oil cheaper for importing countries. Furthermore, due to supply-chain issues brought on by the resurgence of COVID cases, the prices improved in late Q4. The ChemAnalyst database has shown that Fatty Acid C8-C10 FOB Shanghai prices settled at USD 6915 per ton in December.
Europe
The prices of Fatty Acids edged higher at the start of the fourth quarter of 2022 and then dipped, demonstrating mixed market sentiments. The rising cost of energy has weighed on the domestic manufacturing of products. As a result, the manufacturing PMI decreased to 45.7 in October. According to market participants, supply constraints have been eased, and the operating rate of manufacturing units in the domestic region has been consistent. Intensified inflationary pressures and rising interest rates have curtailed the purchasing power of the end-use industries and caused a fall in the Fatty Acid market. However, an improvement in demand in December have reinforced the pricing dynamics of Fatty Acid in the German market. Fatty Acid C8-C10 FOB Hamburg Prices were assessed at USD 7540 per ton in Q4-end.
For the Quarter Ending September 2022
North America
Fatty Acid prices have demonstrated mixed sentiments in the USA market. The prices escalated and fell in the third quarter's latter half. The cost support from input materials was also inadequate as the prices kept oscillating in the regional market. Several disruptions, such as extreme weather in Australia and transportation issues in the USA, have impacted the supply dynamics of Fatty Acid. The adverse developments in the personal care and cosmetics markets have pushed the demand dynamics for upstream Fatty Acids to demonstrate a southward trend in the domestic market in September. However, plateauing inflationary pressures have been observed towards the end of the third quarter. Consequently, Fatty Acid Stearic Acid Triple Pressed DEL USGC prices averaged at USD 1695 in Q3-end.
Asia-Pacific
The prices of Fatty Acids have retained their downward momentum throughout the third quarter of 2022 in China. The Chinese economy battled new covid cases in early Q3 and crippled manufacturing activities. The downstream demand from personal care industries also fell, and the traders were reluctant to clear off their inventories. As a result, a consistent plunge has been observed in the prices offered for Fatty Acids in the domestic region. In addition, the pricing patterns for upstream Palm Oil have been on a downward trend due to overflowing inventories in the manufacturing countries, Indonesia and Malaysia. The slowdown in demand has further compounded the challenges for the market growth of Fatty Acid in the domestic region. Fatty Acid C8-C10 FOB Shanghai prices were settled at USD 7015 per tonne in September.
Europe
In Germany, the decline in new orders from downstream personal care industries has reduced the price offers for Fatty Acids in the first half of the third quarter. The supply turmoil unleashed by Russia's invasion of Ukraine has prolonged global economic challenges that have driven up the energy material costs and caused uncertainty in delivery times and product availability. In September, the downtick in demand from the downstream industries, coupled with escalating values of natural gas, hampered the production capacities of manufacturing firms. The lower offtakes from the terminal market have resulted in high stockpiles in the domestic market of Germany; as a result, the manufacturers have reduced their quotations. Thus, Fatty Acid C8-C10 FOB Hamburg prices concluded at USD 7550 per tonne at the end of the third quarter.
For the Quarter Ending June 2022
North America
In North America, the Fatty Acid prices showcased mixed sentiments throughout the quarter of 2022 on account of slow demand from downstream sectors such as cosmetics, food, and personal care. Towards the starting of the quarter, the prices of Fatty acids remained on the upper edge as palm oil and coconut oil prices were high. Fatty Acid manufacturers faced supply shortages from Asian countries that as Indonesia and Malaysia. These countries restricted the export quantity of feedstock, palm oil increasing the gap between demand and supply chain in the regional market. Increment in feedstock prices led to a high production cost of Fatty Acids in the regional market. Towards the end of the quarter, the prices declined in the North American market as the manufacturers had ample feed to cater to the domestic market.
Asia Pacific
In the second quarter of 2022, the prices of Fatty Acids followed the uptrend in the Asian Pacific region. The key factors driving the market sentiments toward Fatty Acids include increased feedstock costs and palm oil in the regional market. Furthermore, the demand from downstream cosmetics, food, and personal care sectors remained active, proportionally governing the market sentiments toward Fatty Acids. Indonesia and Malaysia restricted palm oil export as the country faced product shortages in their domestic market. Furthermore, China faced lockdown restrictions halting the production of Fatty Acids in the domestic market. Demand from India, Japan, and South Korea remained brisk, governing the market sentiments of Fatty Acids in the regional market.
Europe
The second quarter of 2022 observed a fantastic hike in the prices of Fatty Acids in the European market on account of increased feedstock, palm oil, and coconut oil prices in the regional market. Asian suppliers restricted palm oil export, leading to a feeding shortage. The demand from downstream, soaps, cosmetics, and food sectors remained high throughout the quarter. The feedstock shortage occurred with the Fatty acid manufacturers as the supply chain was disrupted. Freight charges also remained high due to port congestion and vessel shortage in the domestic ports. This increased the production cost of Fatty Acids in the regional market
For the Quarter Ending March 2022
North America
In North America, the Fatty Acid prices surged upwards under pressure from the domino effect of feedstock Palm oil tightness in the overseas market. The Fatty Acid prices traded higher than contracts during Q1-2022 owing to soaring demand for cleaning agents. The supply-side constraints got enhanced by the continuing shortage of vessels from Europe due to the Russia-Ukrainian war, which led to supply disruptions in the international market. As a result, local downstream buyers had difficulty getting their hands on deliveries with container scarcity. Moreover, enhanced demand from the downstream personal care, cosmetic, and detergent industries brought prices to USD 1896/MT in March for Fatty Acid Stearic Acid Triple Pressed DEL USGC in the United States.
Asia Pacific
Being a heavily imported commodity, primarily from Indonesia and Malaysia, Fatty Acid pricing dynamics in Asia went to record heights and witnessed a bullish market scenario in the first quarter of 2022. The market fundamentals were stout against the surging demand for cleaning agents and personal care segments in the region on concerns over the omicron variant, which rapidly gained strength in China. Also, buying sentiments increased during the Chinese New Year and Beijing Olympics in early February. Players remained under cost pressure with increased raw material costs and constricted import volumes with export restrictions from Indonesia. Thus, the prices climbed steadily in China, reaching USD 6300/MT for Fatty Acid C8-C10 FOB Shanghai in March 2022.
Europe
In Q1-2022, the European Fatty Acid prices maintained a bullish trend taking strong cost support from the feedstock Palm Oil prices, which kept on skyrocketing in the global market. The high freight costs on raw material deliveries caused by logistical constrictions and the catastrophic energy crisis in the region with the geopolitical tension between Russia and Ukraine exerted further pressure on the input costs, thereby worsening the woes of the market players. In the meantime, the market sentiments of the downstream surfactant sector remained healthy as the consumer-buying trends improved across the region, keeping the uphill pricing trend at USD 3950/MT in Germany during the first quarter of 2022.
For the Quarter Ending December 2021
North America
Taking support from the rallying palm oil feedstock prices in the international market and their supply tightness owing to vessel delays from Asian countries, the prices of fatty acids peaked to the highest level during October. In addition to the high input costs, the despair of manufacturers elevated further in the initial weeks of the quarter with the scarce availability of trucks for dispatch of consignments to the downstream industries. Meanwhile, the downstream personal care and the detergents segments projected high demand fundamentals which outpaced the supplies. However, a brief fall in palm oil prices owing to improving port movements and a decline in freight charges capped the prices of fatty acid in the North American region in the later months. The bearishness intensified during the closing days of December as evident from the Fatty Acid prices falling to USD 1760/MT DEL, due to negligible downstream activity amid shutdowns in the Christmas and New Year holidays which led to a contraction in demand for fatty acid.
Asia
The Asian fatty acid market demonstrated bullishness from the strong palm oil feedstock performance in the global market due to low palm oil output in Indonesia and Malaysia. The logistical challenges in addition to the inflationary pressure on the fatty acid prices caused the traded offers to stay firm in India. In China, the low feedstock availability and the government’s “Dual Control Policy” driven production challenges caused manufacturing units like Jiangsu Shengtai (80 KTPA capacity) and Deyuan Gaoke (100 KTPA) to go offline for a certain period. While many manufacturing facilities went out of stock in mid-cut fatty alcohols during a major portion of the quarter, thus increasing the import appetite of the country. The demand from the detergent and the personal care sectors showed headwinds with downstream buyers posing ample enquiries for the product under the market optimism. The continued buoyancy in the market sentiments led the prices of Fatty Acids in India to hover around USD 3130/MT Ex-Ahmedabad and in China, the prices settled at USD 3440/MT on FOB basis during December.
Europe
The European Fatty Acid market in Q4-2021 continued displaying bullish traits in response to the inexplicably high input costs. The global shortage of palm oil feedstock, the delays in their delivery and the astoundingly high energy prices remained the major factors that exerted upward pressure on the input costs. The spot trading activities also received blows from the container scarcity at ports and imposed movement restrictions due to increasing Omicron cases in the region. Germany, which remained one of the highest-hit countries from the resurgence of Covid cases, witnessed a remarkable rise in the consumption of soaps and detergents that triggered a surge in enquiries for Fatty Acid by the downstream sectors and raised manufacturers sentiments for offering firm contract prices. The growing market restrictions towards the end of the quarter burdened the Fatty Acid supply dynamics in the downstream industries, in wake of which the prices in December reached the year’s highest values, settling at USD 4080/MT on FOB basis. The demand in the personal care sector also offered a fair share of contribution in the rising price trends.
